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NextSource Materials Inc (TSE:NEXT)
TSX:NEXT
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NextSource Materials Inc
(TSX:NEXT)
34Underperform
Positive Factors
Commercial Sales
First commercial concentrate sales are expected this quarter, with nameplate capacity of 17ktpa expected to be achieved within the next 12 months.
Strategic Positioning
NEXT's staged, vertically integrated development plan combined with an exclusive partnership secures established anode processing IP, positioning the company as a potential near-term ex-China producer at a time when the electric vehicle battery supply chain is seeking diversification.
Negative Factors
Environmental Permits
The environmental impact assessment process for the Mauritius BAF remains ongoing, creating uncertainty regarding the required permits.
Financial Needs
Current cash balance is approximately US$11M, and it is expected that NEXT will require additional funding in the near term, assuming a US$10M equity raise.
Operational Challenges
The company continues to experience ramp-up challenges at Molo and is working to stabilize and optimize plant operations while balancing ramp-up with market demand.
NextSource Materials Inc (NEXT) vs. S&P 500 (SPY)
Market Cap
C$69.34M
Dividend YieldN/A
Average Volume (3M)87.97K
Price to Earnings (P/E)―
Beta (1Y)-0.13
Revenue GrowthN/A
EPS Growth-57.70%
CountryCA
Employees118
SectorBasic Materials
Sector Strength64
IndustryIndustrial Materials
Share Statistics
EPS (TTM)-0.10
Shares Outstanding184,911,100
10 Day Avg. Volume72,872
30 Day Avg. Volume87,967
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)805.69
Price to Cash Flow (P/CF)-1.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusHold
Number of Analyst Covering1
NextSource Materials Inc Business Overview & Revenue Model
Company DescriptionNextSource Materials Inc (NEXT) is a Canadian-based company focused on the exploration and development of strategic minerals and metals. The company is primarily engaged in the production and commercialization of graphite and other battery materials essential for electric vehicles and renewable energy solutions. Its flagship project is the Molo Graphite Project located in Madagascar, which is recognized for its high-quality graphite deposits.
How the Company Makes MoneyNextSource Materials Inc generates revenue through the extraction, processing, and sale of graphite and related materials. The company's primary revenue stream comes from the production and sale of flake graphite, which is used in various applications including batteries, refractories, and other industrial uses. Additionally, NextSource may engage in strategic partnerships and off-take agreements with manufacturers and other companies in the battery and energy sectors to secure long-term sales contracts and ensure a steady revenue flow. The success of their flagship Molo Graphite Project and its capacity to produce high-quality graphite significantly contributes to the company's earnings potential.
NextSource Materials Inc Financial Statement Overview
Summary
NextSource Materials Inc faces significant financial challenges with persistent operational losses, negative cash flows, and high leverage. Despite some improvements in equity and revenue, the company needs to address its profitability and cash flow issues to ensure long-term viability.Income Statement
The company has consistently generated negative gross profit, EBIT, and net income over the years, indicating significant financial challenges in achieving profitability. The revenue growth in TTM is notable but insufficient to offset ongoing losses. The persistent negative margins highlight a struggling operational environment.10
Very Negative
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio due to accumulating liabilities and negative equity in previous years. Although stockholders' equity has improved recently, the overall leverage remains high, posing financial risk. The equity ratio has seen some improvement, but stability remains a concern.35
Negative
Cash Flow
Negative operating and free cash flows over the years reflect operational cash burn, with no free cash flow growth. The company remains heavily reliant on external financing to sustain operations. The cash flow to net income ratios are concerning, indicating cash flow challenges relative to income.20
Very Negative
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 51.59K | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Gross Profit |
| -560.01K | -239.00 | 0.00 | -100.20K | -6.59K | -6.05K | EBIT |
| -7.32M | -7.18M | -4.40M | -2.12M | -5.37M | -1.36M | EBITDA |
| -9.14M | -7.37M | -4.58M | -2.56M | -5.52M | -1.36M | Net Income Common Stockholders |
| -11.61M | -9.00M | -11.68M | -21.46M | -42.11M | -978.41K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.32M | 10.77M | 6.89M | 9.79M | 22.44M | 222.31K | Total Assets |
| 96.58M | 92.85M | 52.98M | 29.30M | 26.92M | 273.44K | Total Debt |
| 21.66M | 21.20M | 11.50M | 349.82K | 11.10K | 38.13K | Net Debt |
| 18.34M | 10.43M | 4.61M | -9.44M | -22.43M | -184.17K | Total Liabilities |
| 41.26M | 40.55M | 27.77M | 32.36M | 53.07M | 1.18M | Stockholders Equity |
| 55.32M | 52.30M | 25.20M | -3.06M | -26.15M | -910.62K |
| Cash Flow | Free Cash Flow | ||||
| -26.99M | -21.05M | -20.56M | -14.60M | -5.75M | -1.33M | Operating Cash Flow |
| -13.06M | ― | -7.05M | -1.63M | -1.43M | -1.33M | Investing Cash Flow |
| -22.50M | -20.93M | -14.05M | -13.14M | -4.33M | 306.72K | Financing Cash Flow |
| 6.85M | 33.70M | 18.46M | 2.05M | 27.83M | 1.02M |
NextSource Materials Inc Technical Analysis
Negative
0.38
Price Trends
0.54
Negative
0.61
Negative
0.67
Negative
Market Momentum
-0.04
Negative
39.14
Neutral
40.48
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NEXT, the sentiment is Negative. The current price of 0.38 is below the 20-day moving average (MA) of 0.40, below the 50-day MA of 0.54, and below the 200-day MA of 0.67, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 39.14 is Neutral, neither overbought nor oversold. The STOCH value of 40.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:NEXT.
NextSource Materials Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
55 Neutral | C$12.62M | ― | -58.91% | ― | -83.85% | -24.32% | |
55 Neutral | C$11.00M | 0.99 | -28.23% | ― | ― | ― | |
47 Neutral | $2.64B | -3.21 | -21.68% | 3.30% | 4.19% | -30.23% | |
45 Neutral | C$160.64M | ― | -54.98% | ― | 92.38% | 12.79% | |
39 Underperform | C$310.61M | ― | -70.44% | ― | ― | -13.44% | |
34 Underperform | C$69.34M | ― | -20.63% | ― | ― | -57.70% |
* Basic Materials Sector Average
Performance Comparison
TSE:NEXT
NextSource Materials Inc
0.32
-0.38
-54.29%
TSE:ZEN
Zentek
1.48
-0.03
-1.99%
TSE:NOU
Nouveau Monde Mining
1.91
-1.08
-36.12%
TSE:GMA
Geomega Resources
0.09
-0.04
-30.77%
TSE:LLG
Mason Graphite
0.06
-0.07
-53.85%
NextSource Materials Inc Earnings Call Summary
Earnings Call Date: Feb 14, 2025 | % Change Since: -44.12% | Next Earnings Date: May 9, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong strategic moves and long-term growth potential, especially in securing liquidity and strategic partnerships. However, the company is still facing significant market challenges, including oversupply in the graphite market and delays in reaching commercial production at the Molo Graphite Mine.Highlights
Strong Liquidity Position
Secured a drawdown credit facility of up to US$20 million with Vision Blue Resources Limited, enhancing liquidity for Battery Anode Facility strategy and general working capital.
Strategic Partnerships and Expansion
Secured shipments of high-quality SuperFlake graphite to Germany and the U.S., and ongoing efforts to secure long-term BAF offtake agreements.
Positive Market Long-Term Outlook
Global battery demand expected to surge, with 97 new graphite mines needed by 2035 according to Benchmark Minerals Intelligence.
Strong Management Team
Strengthened management team with new CFO and key roles to support global growth strategy.
Lowlights
Challenging Market Conditions
Graphite market in oversupply with declining natural graphite prices due to weaker than expected EV demand and market flooding by China.
Commercial Production Delays
Commercial production at Molo Graphite Mine not yet declared, impacting production volume and cost disclosure.
Regulatory Delays in Mauritius
Delays in receiving environmental assessment for Battery Anode Facility in Mauritius due to government changes.
Company Guidance
During the call, NextSource Materials, Inc. highlighted several key metrics and objectives for the fiscal year 2025. The company reported a cash position of $3.3 million as of December 31, 2024, and secured additional liquidity of up to $20 million through a credit facility with Vision Blue Resources Limited. The Molo Graphite Mine's ramp-up aims to reach production of 15,000 to 17,000 tonnes per year, balancing capacity with market demand and sales channels. Despite challenging market conditions marked by a graphite oversupply, the company remains optimistic about the long-term market outlook, anticipating price recovery driven by rising EV demand. NextSource is focused on optimizing the Molo plant and securing strategic BAF offtake agreements and OEM partnerships to support its Battery Anode Facility strategy. The company also aims to expand its customer base and optimize working capital to support growth.NextSource Materials Inc Corporate Events
Business Operations and Strategy
NextSource Materials Reports Strategic Progress Amidst Graphite Market Challenges
Neutral
Feb 15, 2025
NextSource Materials Inc. has provided an update on its operations for the Molo Graphite Mine and battery anode facility development amidst challenging market conditions. Despite an oversupply in the graphite market and declining prices due to lower-than-expected EV demand and competition from synthetic graphite, the company remains committed to optimizing its operations. The company’s strategy includes ramping up production, optimizing processes, and securing strategic partnerships to align with the anticipated surge in global battery demand. These efforts are aimed at ensuring sustained capacity, reducing costs, and increasing economic feasibility to meet future market demands.
Private Placements and FinancingBusiness Operations and Strategy
NextSource Secures $20 Million Credit Facility for Expansion
Positive
Jan 30, 2025
NextSource Materials Inc. has secured a US$20 million credit facility from Vision Blue Resources Limited to support the ramp-up and growth of its Molo Graphite Mine and advance its Battery Anode Facility strategy. This non-dilutive financing aims to enhance the company’s position in the battery materials market, with the facility structured to be drawn down in four tranches and carrying an interest rate of 15% per annum. As Vision Blue holds a significant stake in NextSource, this transaction is classified as a related party transaction but is exempt from minority shareholder approval.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.